TaxTMI 
TaxTMI 
1972 (5) TMI 1
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.... was called upon to pay during the previous year to the assessment year 1958-59 could properly be allowed as deduction in the assessment of that year?" 2. The statement of case relates to the assessment year 1958-59, the relevant accounting year being 2014 R.N. It is admitted that the assessee maintains the mercantile system of accounting. 3. The facts appearing in the statement of case are briefly as follows. The assessee is an unregistered firm doing business in jute and other commodities at Dhubri. The Superintendent of Sales Tax assessed the firm to sales tax amounting to Rs. 47,625, in respect of business in jute during the periods ending on March 31, 1949, September 30, 1949, and March 31, 1950. The assessee filed appeals before....
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....he final demand for full payment of Rs. 43,377, during the year 1957-58, for the period in question after the Commissioner of Taxes, Assam, had rejected the revision filed by the assessee. The Tribunal also found that after the Commissioner of Taxes rejected the assessee's petition in revision, the liability in respect of sales tax payable to the Government was debited in its books and, under the mercantile system of accounting, the liability has got to be allowed is a deduction as soon as it has been finally determined. 4. The short point that arises for consideration is whether the expenditure claimed by the assessee under section 10(2)(xv) is a permissible deduction in law ? 5. It is not disputed that the expenditure, being the....
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.... we are concerned, the moment a dealer makes either purchases or sales which are subject to taxation, the obligation to pay the tax arises and taxability is attracted. Although that liability cannot be enforced till the quantification is effected by assessment proceedings, the liability for payment of tax is independent of the assessment. It is significant that in the present case, the liability had even been quantified and a demand had been created in the sum of Rs. 1,49,776 by means of the notice dated 21 st November, 1957, during the pendency of the assessment proceedings before the Income-tax Officer and before the finalisation of the assessment. It is not possible to comprehend how the liability would cease to be one because the assess....
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....submits that in this decision, which is also relied upon by Mr. B.K. Das for the assessee, it is apparent that the demand was made on November 21, 1957, when the assessment proceeding for the assessment year 1955-56, of which the previous year ended on December 31, 1954, was pending and the assessee filed a revised return on November 9, 1959, claiming the aforesaid deduction. The Income-tax Officer completed the assessment in that case on March 11, 1960, before any final decision was given in the proceedings relating to the assessment of sales tax. It is also clear from the report that the expenditure on account of sales tax demand was of the accounting year in question ending on 31st December, 1954. On account of the above features, Mr. Bh....
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....mely: (i) what is the system of accountancy adopted by the assessee ? and (ii) if it is the mercantile system of accountancy, subject to the deemed provisions, when has the right to receive that amount accrued? If he comes to the conclusion that such a right accrued or arose to the assessee in a particular accounting year, he shall include the said income in the assessment of the succeeding assessment year. No power is conferred on the Income,-tax Officer under the Act to relate back an income that accrued or arose in a subsequent year to another earlier year on the ground that the said income arose out of an earlier transaction." 9. We are unable to hold that this decision is at all of assistance to the 'learned counsel in this case....